Indices Performing Well
STOCK INDEX FUTURES
Stock index futures are higher on the last trading day of July on ideas that central banks are nearing an end to their tightening cycle.
In addition, traders continue to focus on corporate earnings results.
The 8:45 central time July Chicago PMI is expected to be 43.5.
The 9:30 July Dallas Federal Reserve manufacturing index is anticipated to be -22.5.
Most analysts appear to be bearish on balance, which from a contrarian point of view, suggests higher prices for stock index futures at least in the short run.
Consumer prices in the euro zone grew by 5.3% this month versus 5.5% in June, extending a downtrend that started late last year. Excluding energy and unprocessed food, prices increased 6.6% after a 6.8% advance a month ago. The European Central Bank’s target for inflation is 2.0%.
The euro zone economy grew by 0.3% in the second quarter of 2023 after a flat first quarter, and slightly surpassed the market consensus of a 0.2% expansion.
Japan’s industrial output increased 2.0% in June from a month prior on a seasonally adjusted basis, missing the 2.4% median market forecast.
The Reserve Bank of Australia will hold its policy meeting tomorrow. Australia’s policy tightening campaign may be coming to an end. Economists are divided over the timing of the RBA’s likely last interest rate increase in this cycle.
INTEREST RATE MARKET FUTURES
Financial futures markets are predicting there is an 80% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its September 20 policy meeting, and there is a 20% probability of a 25 basis point increase.
The Federal Open Market Committee’s 25 basis point increase in its fed funds rate on July 26 is probably the last one in this cycle.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.